Authors: Nicole Jao & Colleen Howe

Oil Prices on the Rise

By Friday morning in Asia, oil prices made a slight upward move, heading for a weekly spike of over 3%. The surge comes as U.S. job reports eased fears about demand, while worries about escalating conflicts in the Middle East still hang in the air.

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The Numbers Speak

Brent crude futures climbed just 2 cents, or 0.03%, reaching $79.18 a barrel by 0651 GMT. Meanwhile, West Texas Intermediate (WTI) crude enjoyed a 10-cent increase, settling at $76.29 per barrel. Both indices are set for a healthy weekly gain.

Market Sentiment Shifts

“The mood has improved after last week’s market plunge,” says market analyst Tina Teng. “Plus, the latest job data from the U.S. adds a positive twist for oil.” She remarked how the Chinese inflation figures also hinted at a recovering economy.

China’s Inflation Report

According to recent stats, China’s consumer price index (CPI) rose by 0.5% in July from the previous year. This was above the anticipated 0.3% in a survey of economists and better than June’s 0.2%. Although the news sparked a rally in Chinese stocks, analysts cautioned that this increase might result from weather disruptions in food supply rather than a real boom in consumer demand.

Job Data Boosts Confidence

In the U.S., a drop in new unemployment claims also lit up the markets. The figures suggest that fears of a collapsing labor market may be overblown, helping to ease recession worries. However, a stronger U.S. dollar, often a buzzkill for oil prices, could complicate matters for buyers abroad.

Geopolitical Tensions Rise

Conflict flared again as Israeli airstrikes struck Gaza, reportedly killing around 40 people. There’s a palpable tension as Israel prepares for potential wider hostilities in the region, keeping the geopolitical risks at the forefront.

Impact of Militant Activity

Recent actions by Iranian-aligned groups underscore the chaotic landscape. Houthi militants have ramped up their attacks on international shipping, seemingly in solidarity with the Palestinians. These actions have raised questions about oil supply stability in a region that’s already a leading producer.

Hiccups in Libyan Oil Production

Meanwhile, Libya’s oil headlines aren’t looking great. The National Oil Corporation has declared force majeure at the Sharara oilfield due to ongoing protests, substantially cutting back production there.

Royal Developments in Saudi Arabia

In an intriguing twist, Saudi King Salman has allowed the cabinet to meet without him and Crown Prince Mohammed bin Salman, indicating possible shifts in leadership dynamics. King Salman has been on the mend since receiving treatment for lung inflammation, while his son has been calling the shots since 2017.

Trading Pause in Singapore

Lastly, oil market activities were slightly subdued due to public holidays in Singapore, a key trading hub. Traders are keeping a keen eye on the unfolding global events.